EX-99 2 ex991q22005earnings.txt EX-99.1 NEWS RELEASE Q2 2005 EARNINGS EX-99.1 FREMONT GENERAL NEWS RELEASE -------------------------------------------------------------------------------- 2425 Olympic Blvd., 3rd Floor Santa Monica, CA 90404 TEL (310) 315-5500 FAX (310) 315-5599 FREMONT GENERAL REPORTS DILUTED NET INCOME PER SHARE OF $1.21 FOR THE SECOND QUARTER OF 2005 (SANTA MONICA, CALIFORNIA) - July 28, 2005 - Fremont General Corporation (the "Company"), a nationwide residential and commercial real estate lender doing business primarily through its wholly-owned industrial bank subsidiary, Fremont Investment & Loan, reported today its results for the second quarter of 2005. Net income for the second quarter of 2005 was $90,770,000, which represents a decrease of 4.8%, as compared to net income of $95,378,000 for the second quarter of 2004. Diluted net income per share was $1.21 for the second quarter of 2005, down 7% as compared to $1.30 per share for the second quarter of 2004. Net income for the first six months of 2005 was $180,872,000, an increase of 1.6% as compared to $178,041,000 for the first six months of 2004. Diluted net income per share was $2.43 for the first six months of 2005, as compared to the same $2.43 per share for the first six months of 2004. RESIDENTIAL REAL ESTATE LENDING Residential real estate loan originations totaled $9.24 billion during the second quarter of 2005, up from $5.89 billion during the second quarter of 2004. The following table highlights the Company's residential real estate loan originations by period indicated:
2ND QUARTER FIRST SIX MONTHS ---------------------------- ------------------------------- 2005 2004 2005 2004 ----------- ----------- ------------ ------------- LOAN ORIGINATION VOLUME (IN $000'S): First Mortgages .............................. $ 8,433,079 $ 5,549,589 $ 15,593,510 $ 10,435,561 Second Mortgages ............................. 810,600 341,906 1,411,841 549,035 ----------- ----------- ------------ ------------ $ 9,243,679 $ 5,891,495 $ 17,005,351 $ 10,984,596 =========== =========== ============ ============
As a result of this volume, loans held for sale increased to $5.49 billion at June 30, 2005, up from $4.43 billion at June 30, 2004. The following tables detail the origination aspects of the Company's loan originations by period indicated:
2ND QUARTER FIRST SIX MONTHS ------------------------ ------------------------ 2005 2004 2005 2004 ---------- --------- --------- --------- FIRST MORTGAGES - ORIGINATION: TYPE OF PRODUCT: Adjustable Rate (2/28) ............................ 85.7% 78.6% 86.1% 75.1% Adjustable Rate (3/27) ............................ 2.9% 4.5% 2.9% 4.1% Adjustable Rate (5/25) ............................ 0.9% 0.0% 0.9% 0.0% Fixed ............................................. 10.5% 16.9% 10.1% 20.8% --------- --------- --------- --------- 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= PURPOSE: Refinance ......................................... 50.5% 57.2% 52.4% 59.5% Purchase .......................................... 49.5% 42.8% 47.6% 40.5% --------- --------- --------- --------- 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========== Average Loan Size ................................... $ 241,166 $ 211,550 $ 237,829 $ 209,530 Average FICO Score .................................. 624 621 623 621 Average LTV ......................................... 81.0% 80.9% 81.0% 81.4% Weighted Average Coupon ............................. 7.15% 6.83% 7.10% 6.86% FIRST & SECOND MORTGAGES - ORIGINATION: GEOGRAPHIC DISTRIBUTION: California ........................................ 27.9% 37.1% 29.0% 37.5% New York .......................................... 11.1% 10.1% 11.0% 11.2% Florida ........................................... 10.6% 7.7% 10.2% 7.8% New Jersey ........................................ 6.8% 6.5% 6.9% 5.2% Maryland .......................................... 5.5% 3.9% 5.3% 3.7% All other states .................................. 38.1% 34.7% 37.6% 34.6% --------- --------- --------- --------- 100.0% 100.0% 100.0% 100.0% ========= ========= ========= =========
The net gain on the sale of residential real estate loans during the second quarter of 2005 totaled $92.0 million (or 0.93%) on whole loan sales and securitizations of $9.76 billion, as compared to a gain of $127.1 million (or 2.46%) on whole loan sales and securitizations of $5.18 billion during the second quarter of 2004. The gross premiums realized on whole loan sales and securitizations during the second quarter of 2005 were lower than in the second quarter of 2004 primarily as a result of lower interest rate margins reflecting increased price competition in the non-prime mortgage origination market. Page 2 of 9 COMMERCIAL REAL ESTATE LENDING Commercial real estate loans held for investment, before the allowance for loan losses, totaled $3.73 billion at June 30, 2005, as compared to $3.84 billion at June 30, 2004. New loan commitments entered into increased to $1.16 billion during the second quarter of 2005, up from $1.06 billion during the first quarter of 2005 and $644.8 million in the second quarter of 2004. The increase in loan commitments has not resulted in a corresponding increase in the Company's loans outstanding due to a higher level of loan portfolio run-off and lower average fundings on new loan commitments entered into. The following table highlights the commercial real estate loans outstanding as of the dates indicated:
JUNE 30, JUNE 30, (IN $000'S) 2005 2004 ----------- ----------- COMMERCIAL REAL ESTATE ("CRE") LOAN TYPES: Bridge .................................................................... $ 1,613,630 $ 1,660,599 Construction .............................................................. 1,238,396 957,771 Permanent ................................................................. 777,115 1,031,728 Single Tenant Credit ...................................................... 139,287 222,625 ----------- ----------- $ 3,768,428 $ 3,872,723 Net deferred origination fees and costs ................................... (35,996) (32,030) ----------- ----------- TOTAL CRE LOANS - NET ....................................................... $ 3,732,432 $ 3,840,693 =========== =========== GEOGRAPHIC DISTRIBUTION: California ................................................................ 30.6% 35.0% New York .................................................................. 15.3% 13.0% Florida ................................................................... 12.7% 9.5% Illinois .................................................................. 5.5% 8.8% Texas ..................................................................... 5.3% 5.2% Virginia .................................................................. 3.4% 3.0% All other states .......................................................... 27.2% 25.5% ----------- ----------- 100.0% 100.0% =========== =========== Non-accrual loans ........................................................... $ 33,113 $ 62,162 REO ......................................................................... 18,106 24,494 ----------- ----------- Non-accrual loans and REO ................................................... $ 51,219 $ 86,656 =========== =========== Non-accrual loans to total CRE loans - net .................................. 0.89% 1.62%
Non-accrual commercial real estate loans and REO totaled $51.2 million (comprised of 8 loans and 6 REO properties) at June 30, 2005, down from $86.7 million (comprised of 13 loans and 9 REO properties) as of June 30, 2004. Net loan charge-offs for the commercial real estate portfolio increased during the second quarter of 2005 to $7.8 million from $4.9 million during the second quarter of 2004. Of the $7.8 million in net loan charge-offs in the second quarter of 2005, $6.2 million came from one loan. The annualized net charge-off ratio for the quarter ending June 30, 2005 for the commercial real estate loan portfolio was 0.81%, as compared with a ratio of 0.50% for the quarter ended June 30, 2004. The annualized net charge-off ratio Page 3 of 9 for the six month period ending June 30, 2005 was 0.45%, a decrease as compared to 0.71% the first six months of 2004. OTHER HIGHLIGHTS o Net interest income increased to $128.0 million for the second quarter of 2005, as compared to $121.4 million for the second quarter of 2004. Net interest income increased as a result of increased average interest-earning assets; however, net interest income, as a percentage of net interest-earning assets at the financial services operations level, while still at strong levels, decreased to 4.63% for the second quarter of 2005 from 5.17% for the second quarter of 2004. This decrease is primarily a result of lower interest rate margins as funding costs increased faster than the yields on the loans outstanding during the second quarter of 2005. o As a result of the decrease in the non-accrual loan balances in the commercial real estate loan portfolio in the second quarter of 2005, the Company realized a decrease in its provision for loan losses, which resulted in a $4.22 million credit to income as compared to a $146,000 expense for the second quarter of 2004. As of June 30, 2005, the allowance for loan losses totaled $160.0 million, or 4.28% of the total commercial real estate loans held for investment. o Fremont Investment & Loan, as of June 30, 2005, had $10.8 billion in assets and $8.3 billion in FDIC-insured deposits, with a total Risk-Based Capital ratio of 19.62%. o The residential real estate loan servicing platform was servicing approximately $21.0 billion in loans outstanding as of June 30, 2005. This amount was comprised of the Company's securitized loans, loans held for sale and interim servicing for loans sold to third parties. o Stockholders' equity per share was $15.37 at June 30, 2005. LITIGATION DEVELOPMENTS On July 22, 2005, the Company received a Notice of Appeal to the Superior Court of California's April 22, 2005 dismissal of a lawsuit brought by the State of California Insurance Commissioner on behalf of Fremont Indemnity Company as successor in interest to Comstock Insurance Company ("Comstock") against the Company. The dismissed lawsuit alleged improper utilization by the Company of certain net operating losses allegedly belonging to Comstock as well as improper transactions with other insurance affiliates of Comstock. The Company continues to believe, as the Superior Court of California held, that this litigation is without merit. Fremont General Corporation's common stock is traded on the New York Stock Exchange under the symbol "FMT". Fremont Investment & Loan provides nationwide commercial and non-prime residential real estate lending through its 14 regional offices (nine commercial and five residential) and does so primarily on a first mortgage basis. As of June 30, 2005, Fremont Investment & Loan had commercial real estate loans in its portfolio located in 36 states and during the second quarter of 2005, it originated residential real estate loans in 46 states. Page 4 of 9 This news release may contain "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements and the Company's currently reported results are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. These statements and the Company's reported results are not guarantees of future performance and there can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially and adversely from the Company's projected or reported results as a result of significant risks, uncertainties and assumptions that are difficult to predict, including: (i) changes in the interest rate and competitive environments, (ii) changes in general and specific economic conditions and trends, (iii) changes in asset and loan valuations and the costs of originating loans, (iv) changes in the volume of loans originated, loans sold, the pricing of existing and future loans, and the premiums realized upon the sale of such loans, (v) access to the necessary capital and deposit resources to fund loan originations and the condition of the whole loan sale and securitization markets, (vi) the impact of changes in the commercial and residential real estate markets, (vii) the effect of litigation, state and federal legislation and regulations, and regulatory actions, (viii) the collectibility, and timing thereof, of loan balances, and any adverse development of, and the variability in determining, the allowance for loan losses, (ix) the impact of changes in federal and state tax laws and interpretations, including tax rate changes, and the effect of any adverse outcomes from the resolution of issues with taxing authorities, (x) the ability to maintain an effective system of internal and financial disclosure controls, and to identify and remediate any control deficiencies, under the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and (xi) other events and factors beyond our control. For a more detailed discussion of risks and uncertainties, see the Company's public filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statements. -------------------------------------------------------------------------------- o Fremont General will host an investor conference call to discuss the Company's results. The call will begin at 1:00 p.m. (ET) on July 28, 2005. o The call will be webcast live on the Internet at www.fremontgeneral.com. Under "Company" scroll down to "Event Calendar" and click on "Q2 2005 Fremont General Corporation Earnings Conference Call." Go to the web site at least 15 minutes before the event to download and install any necessary audio software. The webcast will be archived through July 28, 2006. o To listen to the live call by telephone, dial 706/634-1256 eight to ten minutes before the start time and use confirmation code 7748516. The telephone replay will be archived through August 26th at 706/645-9291 - use confirmation code 7748516. o The Company's periodic reports as filed with the Securities and Exchange Commission can be accessed at www.fremontgeneral.com or at www.sec.gov. o Contact: Investor Relations 310/315-5500 o Website: www.fremontgeneral.com Page 5 of 9 FREMONT GENERAL CORPORATION (UNAUDITED) (THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED CONSOLIDATED STATEMENTS OF OPERATIONS: JUNE 30, JUNE 30, 2005 2004 2005 2004 --------- --------- --------- -------- INTEREST INCOME: Interest and fee income on loans: Residential ............................................................. $ 125,764 $ 95,003 $ 236,775 $ 183,093 Commercial .............................................................. 76,457 73,087 142,849 149,391 Other ................................................................... 84 165 183 274 --------- --------- --------- --------- 202,305 168,255 379,807 332,758 Interest income - other ................................................... 8,645 2,774 13,067 4,978 --------- --------- --------- --------- 210,950 171,029 392,874 337,736 INTEREST EXPENSE: Deposits .................................................................. 62,300 35,024 111,656 70,058 FHLB advances and warehouse lines of credit ............................... 14,550 8,456 22,275 15,998 Senior Notes .............................................................. 3,651 3,765 7,301 7,973 Junior Subordinated Debentures ............................................ 2,319 2,319 4,639 4,639 Other ..................................................................... 168 60 289 100 --------- --------- --------- --------- 82,988 49,624 146,160 98,768 --------- --------- --------- --------- Net interest income ......................................................... 127,962 121,405 246,714 238,968 Provision for loan losses ................................................... (4,216) 146 (3,180) 16,545 --------- --------- --------- --------- Net interest income after provision for loan losses ......................... 132,178 121,259 249,894 222,423 NON-INTEREST INCOME: Net gain on whole loan sales and securitizations of residential real estate loans ....................................... 91,964 127,050 200,324 249,246 Net loss on extinguishment of debt ........................................ - (53) - (53) Loan servicing income ..................................................... 16,201 7,630 30,188 14,169 Mortgage servicing rights amortization and impairment provision ........... (4,807) (4,514) (9,711) (5,884) Impairment on residual assets ............................................. (572) - (1,790) - Other ..................................................................... 5,784 6,524 9,465 13,158 --------- --------- --------- --------- 108,570 136,637 228,476 270,636 NON-INTEREST EXPENSE: Compensation and related .................................................. 55,654 68,046 114,934 135,230 Occupancy ................................................................. 6,942 3,552 13,877 7,078 Other ..................................................................... 28,119 23,249 48,348 46,009 --------- --------- --------- -------- 90,715 94,847 177,159 188,317 --------- --------- --------- --------- Income before income taxes .................................................. 150,033 163,049 301,211 304,742 Income tax expense .......................................................... 59,263 67,671 120,339 126,701 --------- --------- --------- --------- Net income .................................................................. $ 90,770 $ 95,378 $ 180,872 $ 178,041 ========= ========= ========= ========= EARNINGS PER SHARE: Basic ..................................................................... $ 1.25 $ 1.32 $ 2.50 $ 2.49 Diluted ................................................................... 1.21 1.30 2.43 2.43 WEIGHTED AVERAGE SHARES OUTSTANDING (IN THOUSANDS): Basic ..................................................................... 72,759 72,027 72,271 71,632 Diluted ................................................................... 75,214 73,567 74,515 73,158 CASH DIVIDENDS DECLARED PER COMMON SHARE .................................... $ 0.08 $ 0.06 $ 0.15 $ 0.11 STOCKHOLDERS' EQUITY PER SHARE AT PERIOD-END ................................ $ 15.37 $ 10.98 SHARES OUTSTANDING AT PERIOD-END (IN THOUSANDS) ............................. 77,936 77,166
Page 6 of 9 FREMONT GENERAL CORPORATION (UNAUDITED, EXCEPT FOR DECEMBER 31, 2004) (THOUSANDS OF DOLLARS)
CONSOLIDATED BALANCE SHEETS: JUNE 30, DECEMBER 31, 2005 2004 ------------ ------------ ASSETS Cash and cash equivalents ................................................... $ 1,422,815 $ 904,975 Investment securities classified as available for sale at fair value ........ 1,037 1,236 Federal Home Loan Bank stock at cost ........................................ 156,284 77,127 Loans held for sale - net ................................................... 5,489,368 5,454,692 Loans held for investment - net ............................................. 3,576,832 3,313,089 Mortgage servicing rights - net ............................................. 22,318 18,002 Residual interests in securitized loans at fair value ....................... 16,784 15,774 Accrued interest receivable ................................................. 32,122 34,121 Foreclosed real estate owned ................................................ 21,739 23,922 Premises and equipment - net ................................................ 59,886 54,347 Deferred income taxes ....................................................... 132,331 155,529 Other assets ................................................................ 67,759 53,182 ------------ ------------ TOTAL ASSETS ........................................................... $ 10,999,275 $ 10,105,996 ============ ============ LIABILITIES Deposits: Savings accounts .......................................................... $ 1,192,069 $ 1,283,223 Money market deposit accounts ............................................. 419,681 508,227 Certificates of deposit ................................................... 6,713,986 5,755,530 ------------ ------------ 8,325,736 7,546,980 Warehouse lines of credit ................................................... - - Federal Home Loan Bank advances ............................................. 857,000 900,000 Senior Notes due 2009 ....................................................... 180,290 180,133 Liquid Yield Option Notes due 2013 .......................................... - 611 Junior Subordinated Debentures .............................................. 103,093 103,093 Other liabilities ........................................................... 335,493 361,531 ------------ ------------ TOTAL LIABILITIES ...................................................... 9,801,612 9,092,348 STOCKHOLDERS' EQUITY Common stock ................................................................ 77,936 77,241 Additional paid-in capital .................................................. 343,974 330,328 Retained earnings ........................................................... 832,933 663,580 Deferred compensation ....................................................... (61,369) (58,916) Accumulated other comprehensive income ...................................... 4,189 1,415 ------------ ------------ TOTAL STOCKHOLDERS' EQUITY ............................................. 1,197,663 1,013,648 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............................. $ 10,999,275 $ 10,105,996 ============ ============
Page 7 of 9 FREMONT GENERAL CORPORATION (UNAUDITED, EXCEPT FOR DECEMBER 31, 2004) (THOUSANDS OF DOLLARS)
JUNE 30, DECEMBER 31, JUNE 30, 2005 2004 2004 ----------- ----------- ----------- Loans held for investment: Commercial real estate ................................................... $ 3,732,432 $ 3,480,088 $ 3,840,693 Residential real estate .................................................. - - 918,804 Other .................................................................... 4,356 4,526 7,596 ----------- ----------- ----------- 3,736,788 3,484,614 4,767,093 Allowance for loan losses .................................................. (159,956) (171,525) (214,726) ----------- ----------- ----------- Loans held for investment - net ............................................ $ 3,576,832 $ 3,313,089 $ 4,552,367 =========== =========== =========== Allowance for loan losses as a percentage of: Loans receivable held for investment ..................................... 4.28% 4.92% 4.50% Non-accrual loans held for investment .................................... 483.0% 208.4% 275.1% Total non-accrual loans as a percentage of total loans held for investment ........................................................... 0.89% 2.36% 1.64% Non-accrual loans held for investment: Commercial real estate ................................................... $ 33,113 $ 82,289 $ 62,162 Residential real estate .................................................. - - 12,873 Other .................................................................... - - 3,018 ----------- ----------- ----------- $ 33,113 $ 82,289 $ 78,053 =========== =========== =========== Accruing commercial real estate loans past due 90 days or more ............. $ - $ - $ 26,202 Restructured commercial real estate loans on accrual status ................ $ 12,412 $ 9,302 $ 157,573 Foreclosed real estate owned (REO): Commercial real estate ................................................... $ 18,106 $ 21,344 $ 24,494 Residential real estate .................................................. 3,633 2,578 2,104 ----------- ----------- ----------- $ 21,739 $ 23,922 $ 26,598 =========== =========== =========== Residential real estate loans held for sale: 1st trust deeds .......................................................... $ 4,962,725 $ 5,036,724 $ 4,105,069 2nd trust deeds .......................................................... 517,128 383,039 297,022 ----------- ----------- ----------- 5,479,853 5,419,763 4,402,091 Basis adjustment for fair value hedge accounting ........................... (1,375) (1,327) - Net deferred direct origination costs ...................................... 65,544 74,514 59,999 ----------- ----------- ----------- 5,544,022 5,492,950 4,462,090 Less: Valuation reserve .................................................... (54,654) (38,258) (30,913) ----------- ----------- ----------- Loans held for sale - net .................................................. $ 5,489,368 $ 5,454,692 $ 4,431,177 =========== =========== =========== Non-accrual residential real estate loans held for sale .................... $ 18,263 $ 11,874 $ 7,128 2ND QUARTER 1ST QUARTER 2ND QUARTER 2005 2005 2004 ----------- ----------- ----------- Total net charge-offs of loans held for investment: Commercial real estate ................................................... $ 7,769 $ 621 $ 4,918 Residential real estate .................................................. - (1) 164 Other .................................................................... - - 1,154 ----------- ----------- ----------- $ 7,769 $ 620 $ 6,236 =========== =========== =========== Net commercial real estate charge-offs to average commercial real estate loans ....................................................... 0.81% 0.07% 0.50% o Loans receivable held for investment do not include loans designated as held for sale and are stated net of deferred origination fees and costs. o Net charge-off ratios are annualized percentages. o Accruing loans past due 90 days or more may include loans that are contractually past maturity but continue to make interest payments. o Net deferred direct origination costs include loan origination fees and direct costs associated with the origination of the loans that are deferred and recognized when the loans are sold. o Restructured commercial real estate loans are presented as such in the period of restructure and the three subsequent quarters.
Page 8 of 9 FREMONT GENERAL CORPORATION (UNAUDITED) (THOUSANDS OF DOLLARS)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2005 2004 2005 2004 ------------ ----------- ------------ ----------- Fremont General Credit Corporation (only): Average net interest-earning assets (NEA) ..................... $ 11,499,316 $ 9,857,819 $ 10,890,862 $ 9,609,157 Interest income ............................................. $ 210,210 $ 170,704 $ 391,567 $ 337,151 Interest expense ............................................ (77,339) (43,895) (134,890) (86,857) ------------ ----------- ------------ ----------- Net interest income ......................................... $ 132,871 $ 126,809 $ 256,677 $ 250,294 ============ =========== ============ =========== As a percentage of NEA: Interest income ............................................. 7.33 % 6.96 % 7.25 % 7.06 % Interest expense ............................................ (2.70)% (1.79)% (2.50)% (1.82)% ------------ ----------- ------------ ----------- Net interest income ........................................ 4.63 % 5.17 % 4.75 % 5.24 % ============ =========== ============ =========== o The above net interest income information excludes holding company assets and net interest income and expense. Whole loan sales of residential real estate loans ............. $ 8,776,193 $ 4,385,574 $ 14,625,502 $ 8,180,889 Securitizations of residential real estate loans .............. 981,717 790,125 2,191,566 1,622,758 ------------ ----------- ------------ ----------- $ 9,757,910 $ 5,175,699 $ 16,817,068 $ 9,803,647 ============ =========== ============ =========== Gross premium recognized on loan sales and securitizations .... $ 268,120 $ 208,849 $ 469,816 $ 408,077 Net gain (loss) on derivative instruments ..................... (25,573) 1,678 (8,385) 3,629 Direct costs of loan originations ............................. (125,464) (75,081) (221,657) (140,153) Provision for premium recapture and reversal .................. (10,038) (4,249) (17,594) (12,942) ------------ ----------- ------------ ----------- 107,045 131,197 222,180 258,611 Provision for valuation and repurchase reserves ............... (15,081) (4,147) (21,856) (9,365) ------------ ----------- ------------ ----------- Net gain on sale ........................................... $ 91,964 $ 127,050 $ 200,324 $ 249,246 ============ =========== ============ =========== Gross premium recognized on loan sales and securitizations .... 2.75 % 4.04 % 2.79 % 4.16 % Net gain (loss) on derivative instruments ..................... (0.27)% 0.03 % (0.05)% 0.04 % Direct costs of loan originations ............................. (1.29)% (1.45)% (1.32)% (1.42)% Provision for premium recapture and reversal .................. (0.10)% (0.08)% (0.10)% (0.13)% ------------ ----------- ------------ ----------- 1.09 % 2.54 % 1.32 % 2.65 % Provision for valuation and repurchase reserves .............. (0.16)% (0.08)% (0.13)% (0.09)% ------------ ----------- ------------ ----------- Net gain on sale ............................................ 0.93 % 2.46 % 1.19 % 2.56 % ============ =========== ============ =========== o Percentages are of total loan sales and securitizations, net of repurchases, during the period indicated. o Premium recapture and reversal is the reversal or recapture of premium on loans sold which either prepay early per the terms of each sales contract or for certain loans repurchased from prior sales; includes some interest adjustment on loans repurchased. o Provision for valuation and repurchase reserves represents adjustments to the valuation allowance for the Company's held for sale loans and adjustments to the Company's repurchase reserve for the effect of loans estimated to be repurchased.
05-10-09 # # # Page 9 of 9